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STOCKHOLDERS' EQUITY
12 Months Ended
Dec. 31, 2018
Stockholders Equity Note [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 20—STOCKHOLDERS’ EQUITY

Shares Outstanding and Treasury SharesThe changes in the number of shares outstanding and treasury shares held by us are as follows (in millions):

 

 

 

Year ended December 31,

 

 

 

2018

 

 

2017

 

Shares outstanding

 

 

 

 

 

 

 

 

Beginning balance

 

 

95

 

 

 

80

 

Common stock issued

 

 

2

 

 

 

15

 

Shares issued in the Combination (Note 3, Business Combination)

 

 

85

 

 

 

-

 

Purchase of common stock

 

 

(1

)

 

 

-

 

Ending balance

 

 

181

 

 

 

95

 

 

 

 

 

 

 

 

 

 

Shares held as Treasury shares

 

 

 

 

 

 

 

 

Beginning balance

 

 

3

 

 

 

3

 

Purchase of common stock

 

 

1

 

 

 

-

 

Retirement of common stock

 

 

(1

)

 

 

-

 

Ending balance

 

 

3

 

 

 

3

 

 

 

 

 

 

 

 

 

 

Ordinary shares issued at the end of the period

 

 

183

 

 

 

98

 

 

Combination—As discussed in Note 3, Business Combination, we issued 84.5 million shares of McDermott common stock to the former CB&I shareholders. Additionally, effective as of the Combination Date, unvested and unexercised stock-settled equity-based awards (which included 2.1 million of CB&I restricted stock units and stock options to purchase 0.1 million shares of CB&I’s common stock) were canceled and converted into comparable McDermott stock-settled awards with generally the same terms and conditions as those prior to the Combination Date. The restricted stock units generally vest over a period ranging from three to four years from the original grant date. 

Accumulated Other Comprehensive (Loss) Income―The components of AOCI included in stockholders’ equity are as follows:

 

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

 

(In millions)

 

Foreign currency translation adjustments ("CTA")

 

$

(73

)

 

$

(49

)

Net unrealized loss on derivative financial instruments

 

 

(40

)

 

 

(2

)

Defined benefit pension and other postretirement plans

 

 

6

 

 

 

 

 

Accumulated other comprehensive loss

 

$

(107

)

 

$

(51

)

 

The following table presents the components of AOCI and the amounts that were reclassified during the periods indicated:

 

 

 

Foreign currency translation adjustments

 

 

Net unrealized loss on derivative financial instruments (1)

 

 

Defined benefit pension and other postretirement plans

 

 

TOTAL

 

 

 

(In millions)

 

January 1, 2017

 

$

(42

)

 

$

(25

)

 

$

-

 

 

$

(67

)

Other comprehensive income before reclassification

 

 

(1

)

 

 

16

 

 

 

-

 

 

 

15

 

Acquisition of NCI

 

 

-

 

 

 

2

 

 

 

-

 

 

 

2

 

Amounts reclassified from AOCI (2)

 

 

(6

)

 

 

5

 

 

 

-

 

 

 

(1

)

Net current period other comprehensive income

 

 

(7

)

 

 

23

 

 

 

-

 

 

 

16

 

December 31, 2017

 

$

(49

)

 

$

(2

)

 

$

-

 

 

$

(51

)

Other comprehensive income before reclassification

 

 

(24

)

 

 

(46

)

 

 

6

 

 

 

(64

)

Amounts reclassified from AOCI (2)

 

 

-

 

 

 

8

 

 

 

-

 

 

 

8

 

Net current period other comprehensive income

 

 

(24

)

 

 

(38

)

 

 

6

 

 

 

(56

)

December 31, 2018

 

$

(73

)

 

$

(40

)

 

$

6

 

 

$

(107

)

 

(1)

Refer to Note 17, Derivative Financial Instruments, for additional details.

(2)

Amounts are net of tax, which was not material in 2018 and 2017.

Noncontrolling Interest

NO105―In December 2010, J. Ray McDermott (Norway), AS ( “JRM”), one of our indirectly wholly owned subsidiaries, and Oceanteam ASA entered into an Equity Owner’s Agreement (as amended to date, the “Equity Agreement”), under which JRM acquired 75% interest in NO 105 AS, the vessel-owning company. Under the Equity Agreement, JRM was given an option to purchase Oceanteam ASA’s 25% ownership interest in the second quarter of 2017.

In the second quarter of 2017, JRM exercised its option under the Equity Agreement and purchased Oceanteam’s 25% interest in the vessel-owning company for approximately $11 million in cash. As part of that transaction, JRM also assumed the right to a $5 million note payable from NO 105 AS to Oceanteam (which had been issued in connection with a dividend declared by NO 105 AS in 2016). In connection with this acquisition, we recorded a $9 million decrease in Noncontrolling interest and a $5 million decrease in note payable to Oceanteam, and we recognized a $2 million gain in Capital-in-excess of par value in our Consolidated Financial Statements. 

Berlian McDermott Sdn. Bhd―In 2013, we entered into certain joint ventures with TH Heavy Engineering Berhad (“THHE”), whereby we acquired a 30% interest in THHE Fabricators Sdn. Bhd. (“THF”), a subsidiary of THHE, and THHE acquired a 30% interest in our Malaysian subsidiary, Berlian McDermott Sdn. Bhd (“BMD”). In the third quarter of 2016, we reacquired the 30% noncontrolling interest in BMD from THHE in exchange for our 30% equity interest in THF. We determined the fair value of the asset surrendered to be $17 million. In connection with the acquisition of the BMD noncontrolling interest, we recorded an $18 million decrease in Noncontrolling interest, and, in connection with the exchange of our investment in THF, we recorded a $12 million decrease in Investments in unconsolidated affiliates and a $5 million gain in Other income (expense), net, in our Consolidated Financial Statements.